On August 22, Ford Motor  Co. and Toyota Motor Corp. signed a memorandum of understanding on the collaboration to develop a gas-electric hybrid system for light trucks and sport-utility vehicles.

Photo: WSJ

A formal agreement is expected to be signed next year. If it is done, Ford and Toyota would co-develop a hybrid powertrain system for larger, rear-wheel-drive vehicles such as big pickup trucks and SUVs, says the WSJ. Such an unusual collaboration between two automobile giants is the result of the latest set by the Obama administration.

Well-known Ford Fusion and Toyota Prius, the top-selling hybrid in the U.S., both power front-wheel-drive passenger cars in the companies’ hybrid systems models range.

The Obama administration’s new requirements are to reach even more fuel economy. Called corporate average fuel economy or CAFE—this is a task for auto makers to produce a fleet of vehicles that averages 54.5 miles a gallon by 2025, from the current level of 27.6 miles a gallon.

Ford and Toyota have to hurry up developing the fuel-saving technology for larger vehicles. General Motors Co. already has hybrid cars and a hybrid version of its full-size trucks on the market. It was a motivation for the administration to allow credits for hybrid trucks.

Ford and Toyota said they will partner to develop a new gas-electric hybrid system for use in light trucks and sport-utility vehicles. The companies will conduct a feasibility study and set a timetable with the hope of implementing hybrid technology in trucks or SUVs already this decade. According to Ford’s research-and-development chief, Derrick Kuzak, there are no plans to form a partnership beyond the hybrid development.

«By working together, we will be able to leverage scale to offer our customers more affordable technology sooner,» Mr. Kuzak said. «We can also bring fuel efficiency to a new important part of the market—trucks and SUVs.»

Cost and depth of the co-development are not determined yet.